How the UK could manage if it quit the EU

A member of Britain's diplomatic service has won a 100,000 euro ($140,000) cash prize for his proposal outlining a blueprint for Britain after its potential exit from the European Union.

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Iain Mansfield was awarded the "Brexit Prize" at an event hosted by the Institute of Economic Affairs (IEA) in central London on Tuesday night. Mansfield, 30, is the Director of Trade and Investment at the U.K.'s embassy in the Philippines. His winning proposal, "A Blueprint for Britain: Openness not Isolation" calls for the U.K. to join Iceland, Liechtenstein, Norway and Switzerland in the European Free Trade Association (EFTA) and introduce a "Great Repeal Bill" to review and ultimately dismantle EU regulations.

Mansfield argues that such actions would promote trade between Britain and emerging markets while reducing bureaucratic burdens on British business. He claims that U.K. GDP would increase by £1.3 billion ($2.17 billion) under his proposal.

"My position is not discussing at all whether the U.K. should leave the EU or not," Mansfield told CNBC after receiving the prize on Tuesday night. "However, if we did leave, the thrust of my entry was that the U.K. should embrace openness. Openness to the world, to global trading partners, to foreign investment."

The IEA, a nonpartisan free-market think tank based in London, introduced the Brexit Prize in July 2013 to "improve the debate about what an independent Britain would and could look like outside the EU, given that exit is an increasing possibility after the next election."

U.K. Prime Minister David Cameron has promised to hold an "in/out" referendum on Britain's EU membership if his Conservative Party wins the country's general election next year.

The British public is divided on the issue. According to a poll conducted by YouGov last week, if a referendum were held, 42 percent of British voters would vote to remain in the EU, while 37 percent would vote to leave. Five percent of respondents said they would not vote; 16 percent said they did not know how they would vote.

The think tank asked entrants to imagine a referendum had resulted in an "out" vote and draft a "Blueprint for Britain", outlining a withdrawal process from the EU and a post-exit plan for Britain's global role.

The IEA received 149 initial entries and published a shortlist of 17 applicants in October 2013 before announcing a final list of six candidates last month.

Former Chancellor of the Exchequer Nigel Lawson, who chaired the judging panel and presented Mansfield with his award, has previously called for the U.K. to leave the European Union. But he told CNBC on Tuesday that the Brexit Prize was not about whether the U.K. stays in or leaves the European Union.

"The prize is exactly about this very thing: if we were to leave, how should we organize our affairs to the best advantage? Because if there is going to be a debate about whether we should be in or out and David Cameron, the prime minister, has given the promise of a referendum by 2017, then there needs to be a proper debate, a proper discussion," Lawson said. "Everybody knows what it's like inside, what will it be like outside?"